The inverted U - death by a thousand applications

Productivity is a good thing, it translates to more and better results using less resources. That way it even makes for a very "green" argument, plus it has a decidedly positive effect on corporate profits and government budgets. We obviously want that.

But productivity is a combination of two parameters: It's a result of both how we do things and what things we do. In single terms that would translate to efficiency and effectiveness.

So, are today's main productivity suppliers, the IT vendors, aware of this?

Probably not, as all we hear is efficiency, efficiency, efficiency. Seems effectiveness has been forgotten.

But Peter Drucker knows something else: “There is nothing so useless as doing efficiently that which should not be done at all.”

How many of those 120 daily emails you get add value beyond what the mailman delivered with one hand only a few years back?

If you upgrade your operating system, your office productivity suite, or even your big ticket ERP system - would you be able to recoup the upgrade costs by writing more emails or having even more buttons to click?

What about your "creative" new uses of the "easy to use" applications? You may have noticed that these days it's hard to even plan a lunch meeting unless someone spends two hours in Powerpoint for arguments sake and another one in Excel to analyse the pros and cons.

How many to-do list apps have you installed and tried out last year? Or email clients? Or how many mobile apps do you have? Now, compare the time and effort spent with the imaginary productivity gains you had. Fun it was I hope, because I do not believe it added much more.

Or, when you last exported a presentation deck to PDF and then mailed it to a thousand innocents. You still did the same old thing - trying to convince people - but now highly efficiently if you measure by audience size. Efficiency for you, productivity loss for the recipients.

In sum, we still do the same things as in the pre-IT days hence no change to effectiveness. But of course, we're individually far more efficient.

And here's the not so surprising result: As we never changed what things we did we simple converted the efficiency gains to even more of the same things!

Let's apply some math to this: If productivity only had been a result of a single effect, after the initial steep growth we would simply see a decreasing growth rate until the curve became flat. The first half of the inverted U.

But then, as we still think that even more of the same could magically reignite the growth, the costs trumps the gains, and the productivity curve turns downward. That's where we are now, the inverted U has been shaped and we're sliding downwards. The upgrades and the communication costs have become higher than the gains.

Worse, there exists an irreversible effect that will make our downward slope even steeper: The increased activity level and expanding volume of the same things done fuels the management's insatiable hunger for even more control and analysis. And we know where that leads.

So the poor sap responsible for the value creation has to shift time from actual value creation to reporting and management chores.

And the results are already visible:

In Norway, a place filled with good intentions and oil revenue to spend, healthcare has been the recipient of much cash spent on more and more IT as well as new layers of well-meaning management. The result is that (on average) a physician who eight years ago spent 60% of his time on patients now only spends 43%. The rest, of course, to keep all those management and recording apps up to date. That's almost a 1/3rd loss of core healthcare capacity in eight years!

In the US, the National Bureau of Economic Research followed thousands of hospitals over 14 years and found that implementation of EMR (Electronic Medical Records) actually increased overall costs for everyone the first three years at least.

Despite this the US is still chasing EMRs as the fix-it-all. Even sponsored by the government. This when 27%* of the US GDP will be spent on healthcare in ten years. And that won't work.* Using generally accepted cost growth forecasts and average economy growth last few years.

We have turned the tipping point, the efficiency chase has turned into a negative pursuit. It has to be stopped.

What we need now is a realisation that there is a fundamental difference between efficiency and effectiveness. Focus must be shifted from the former to the latter and we must not be afraid to ask: What would be the best flow of things? What sequence of activities is the most effective? What activities are indeed useful?

Comments

This is an issue not just for healthcare but also for education. The emphasis has been on fiscal considerations in the development & implementation of IT options (PowerPoints, Interactive videoconferencing, etc) but less on the resultant outcomes such as student knowledge and skils (competency). The "average' student/graduate has poor written communication and mathematical skills, yet we continue to assess outcomes in terms of student enjoyment or tolerance of the delivery mode.

Even if I chose to use some examples from healthcare the same issue applies to all work, especially of the Barely Repeatable Process type which applies to all services, health, education and government.

In short, the decline affects the economies as a whole, and the budgets, results and bottom lines specifically.

John, yep you're right there, but think they use the term "effectiveness" differently - measuring the effect of a campaign and all that.
That's not about process and value creation flow effectiveness as such...

Yes. Their creation flow is one that creates a direct flow from their advertisement to the rise in sales, rise in share price or rise in whatever else they can find while not considering any other changes that night have contributed.